ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -A loan period is the amount of time that a borrower will have to repay their loan. It will be determined by factoring in the minimum and maximum payment, interest rate, and principal amount. Simply stated-the start of loan repayment, all the way until the end, is called the loan period.
Detailed explanation-2: -The principal–the money that you borrow. The interest–this is like paying rent on the money you borrow.
Detailed explanation-3: -Credit risk is the possibility of a loss resulting from a borrower’s failure to repay a loan or meet contractual obligations. Traditionally, it refers to the risk that a lender may not receive the owed principal and interest, which results in an interruption of cash flows and increased costs for collection.
Detailed explanation-4: -In general, the longer your loan term, the more interest you will pay. Loans with shorter terms usually have lower interest costs but higher monthly payments than loans with longer terms.